LUKOIL INSIDE AND OUTSIDE OF GEORGIA

EKA LOMIDZE

Lukoil is a vertically integrated company. It has its own oilfields and oilwell. It transports extracted oil to the oil refinery for further processing.

After this the company transports oil to places of realisation. There are more than 25000-26000 realisation places. Lukoil is considered not only producer of petrol and diesel, but also chemical industry products. Though its priorities are mineral oil, profile of chemical production of Lukoil is not little, too. According to the latest data, 150 thousand people work in Lukoil nowadays.
It is a colossal monster that was formed after the disintegration of the Soviet Union, and it represents Russian capital in the world market. Lukoil includes financial group, great insurance group Medved that, mainly, works in the north of Russia and insures its employees who work in harsh climatic environment. The number of employees makes up 130 thousand people. Though group of insurance companies of Lukoil is not yet united into one brand, in fact, it is equal to such great insurance companies as Lloyd.
Processes that are going on in Russia are also of great interest. Today, financial companies of Lukoil have entered the Russian market under the new brand ? “Capital” that will not be merged with Lukoil. Yet from the viewpoint of financial market coming of this group into the Russian financial area is connected with the establishment of interests of Oil Company. Officials of Capital deny any ties with Lukoil saying that Lukoil decided to get rid of the capital that is too far from its profile. However, co-operation between companies of Capital and Lukoil is obvious. This factor is of much interest in the background of the Iraqi war climate. Positions of Russia has notably weakened in the world market, which makes its effect on Lukoil, too. It is, certainly, early to speak about what Lukoil has lost in Iraq, but the fact is that western capital is now activated there. However, proceeding from the present situation, influence of Russian capital in Iraq has weakened, which has a direct effect on Lukoil. As for the company’s position in the world market, it has its own petrol stations in the American Continent. The company has purchased 1500 petrol stations in the northeast zone. Many of them are already functioning. Thus, Lukoil can be reckoned with such companies as Beef. Many large oil companies have united and turned into great monsters for the last few years. From this point of view, Lukoil is considered the fourth greatest company in the market. These companies, in fact, determine economic situation, policy and human fate. Accumulation of Russian capital in the world market was much promoted by quotation of Lukoil shares in international funds.
Vaja Dvalishvili, vice director of Lukoil Georgia, calls it “white business”:
– “Lukoil is not a criminal organisation with great funds. Business of Lukoil is transparent. Otherwise, quotation of this company in international stocks would be impossible. The Russian company has achieved international standards in ten years and deserved image that helped it to occupy place among such companies as Beef, Elf, Shevron. Employees of Lukoil are not only citizens of Russia”.
Lukoil owns oil refineries in Bulgaria and Rumania. It makes business in these countries in accordance with international standards and supplies mineral oil to European countries as well as to France. Lukoil has quite a big segment of this market in Pole and Check Republic. Of former Soviet Republics the company has oil refinery in Ukraine and half of realisation network of this country. Lukoil holds stable positions in Byelorussia, too. As for Georgia, company Lukoil came as importer and it established its positions in the Georgian market in 1997, but it started active work in 2001. The company has started its business in Georgia from five petrol stations.
Vaja Dvalishvili – Georgia is not a quite large realisation market for Lukoil scales. Yet, it is the only company that risked coming to Georgia notwithstanding the country’s small territory. Neither British Petroleum nor Shevron ventured to enter Georgian realisation network. Opponents might say that Georgian market is of no interest for these companies. I would put it in another way: investment in Georgian market is too risky for foreign companies. We have always tried to prove that it is possible to make investments in Georgia. Private capital does not come to Georgia notwithstanding the assistance from the West. Lukoil still ventured to take the risk, i.e. the precedent already exists and we, Lukoil collaborators, try to keep this platform for foreign investors. As for the Georgian company Lukoil Georgia, we intend to open several petrolstations, but not monument ones like the two ones that we have. This number is quite enough for the city. We are going to open small stations that correspond to the world standards. Georgian customers already know about the high level service of Lukoil company.
Our petrol station in Didube has also turned into some sort of “meeting place” where one can meet many prominent persons who sit in cafes. Besides, we have planned many important projects in ecological sphere. Lukoil does not only produce ecologically pollution-free production. Our territories are protected and trimmed. We have our gardeners for this.
Thus, we want to introduce here the culture of foreign countries that Georgia lacks so much. Everything is beautiful and clean in our houses, but the yard is not well-kept. As for plans, our customers demand that we should provide petrol in the whole country, but it is still a long perspective. We are, mainly, Tbilisi-oriented now. Besides, it is possible to drive to and back from West Georgia with full tank, i.e. there is less demand in routes. This year we intend to introduce civilised method of calculation and electronic cards. Introduction of this culture will be very difficult because plastic cards of banks do not work well in Georgia. Though these systems cost much, we will begin to introduce them this year. We will not issue coupons to organisations, but we will issue plastic cards that show fuel capacity. This will make it possible for a manager of organisation to control fuel consumed by a driver. The cost of this card will be symbolic in the beginning, then it will cost in accordance with litre capacity. This fact confirms once again that Lukoil has “white business”. Many foreigners are surprised to see that customers drive into our petrol stations from the rear side, which creates chaotic situation. It is not also clear why anyone should drive into a petrol station at a speed of 120 km. an hour.
Lukoil co-operates actively with customers. We hold monitoring; i.e. we try to increase service level by means of constant training and contacts. We often resort to promotion, trade in serviettes, “flavours” of Lukoil. Pleasant scent in the saloon is always enjoyable. Smoking is not permitted in petrol stations and saloons. Europe produces cars for non-smokers. If you smoke, you should order a car with ashtrays. All “cars for smokers” are, probably, sold in Georgia and Russia. The above-mentioned reveals that Lukoil does not only provide a high-quality fuel, but also service in accordance with world standards.
The great holding Lukoil is presented in Georgia as a realisation network of fuel though there are some attempts of co-operation from Russian party, but these are yet desires and ideas. It is not yet know how fast Lukoil will develop Georgian market. The efforts to occupy a possibly larger market segment in Russia and to decrease Russian influence in Iraq might lead to the increase of Lukoil business in Georgian market.